Fordham Sports Law Forum Hosts Annual Sports Law Symposium

May 02, 2013

On April 19, the Fordham Sports Law Forum assembled a panel of leaders from the world of sports, business, and law for its 17th annual Sports Law Symposium.

The day began with a session entitled “IP Face Off: Athletes, Sponsors, and the Right of Publicity,” during which panelists discussed the implications of joining athletics to marketing. Professional athletes, who have quickly become some of the most marketable people in the world, have repeatedly challenged the licensing of their names and likenesses by their respective leagues, while others have called for a narrower merchandising right for athletes to protect fans’ interests. With marketing and publicity becoming an increasingly integral part of the sports industry, publicity rights, branding, advertising, and other intellectual property issues have become points of controversy as the law works to evolve with business and media practices in sports. The panel was moderated by Fordham Law alumnus Anthony Dreyer ’97, a Partner at Skadden Arps Slate Meagher & Flom LLP who specializes in IP and sports litigation.

Ken Hershman, President of HBO Sports, delivered the keynote address, after which a second panel convened to debate the advantages and disadvantages of Congressional regulation in the world of sports.

The discussion quickly centered on the Mitchell Report, the official report made to the Commissioner of Baseball by former Democratic Senator from Maine George J. Mitchell after an almost two-year investigation into the use of anabolic steroids and human growth hormones in Major League Baseball. At approximately the same time Senator Mitchell’s investigation was being conducted, Congress had launched a second investigation into steroid use in baseball, with players like Mark McGwire and Sammy Sosa asked to testify before a Congressional committee.

“Without a doubt, Congress has something very important to say about the nation’s drug policy, and anabolic steroids have been classified as a Schedule III controlled substance for many years now,” said panelist John Vukelj, a Partner at DLA Piper, the firm that co-authored the Mitchell Report. “If you look at the timeline of when the Congressional hearings took place and what happened afterwards in Major League Baseball, it shows that Congress nudged baseball to action.”

Vukelj went on to say that although he does not believe that Congress should step in to regulate Major League Baseball, their investigation forced the MLB to take steps to address the increasingly widespread use of steroids by strengthening their drug policies.

Speaking on the degree to which Congress should involve themselves in sports regulation, Raphael Prober, a Partner at Akin Gump Strauss Hauer & Feld LLP, commented, “I think if you look back historically at where Congress has been active and how they’ve been active, that will be instructive of where things will go in the future. The electorate will decide if Congress has exceeded their boundaries.”

The day concluded with a panel on morality clauses and ethical issues in sports contracting. With companies increasingly seeking out athletes for endorsement deals, the types of behavior contracts can and cannot proscribe has become a source of controversy in recent years.

Christopher Chase, Counsel at Frankfurt Kurnit Klein & Selz PC, explained that morality clauses do not so much seek to dictate the private behavior of an athlete as much as they penalize them for failing to deliver a positive association between the endorser and the brand. “What the brand is buying is the positive association and reputation of the athlete. We don’t really care if you’re moral or immoral. What we care about is the positive association we’re taking from you in order to enhance our brand. When something becomes public, that’s where the problem really arises,” he said.

Panelists agreed that while companies generally seek to keep morality clauses as vague as possible in order to protect their brand under various conditions, it is in athletes’ best interests for the terms of the morality clause to be as specific as possible. In the event of a violation of the morality clause, it is at the company’s discretion to decide whether or not to terminate the contract.

Scott Rosner, Professor of Legal Studies and Business Ethics at the Wharton School of the University of Pennsylvania, said that morality clauses have become a more prominent part of contract negotiations because athletes’ and celebrities’ personal lives have become a selling point in the media. “With social media, because you’re in the news cycle 24/7, the downside of course is that the more you’re out there, the more rope you have with which to hang yourself if you’re an athlete or a celebrity.”

“It is a matter of leverage,” said Rosner. “It depends on who exactly it is that violates the morals clause and how successful they are.”

The symposium was broadcast live, and video from the event can be viewed here.